BEIJING, Jan 29 (Reuters) - Chinese tech company Alibaba ( BABA )

on Wednesday released a new version of its Qwen 2.5

artificial intelligence model that it claimed surpassed the

highly-acclaimed DeepSeek-V3.

The unusual timing of the Qwen 2.5-Max's release, on the

first day of the Lunar New Year when most Chinese people are off

work and with their families, points to the pressure Chinese AI

startup DeepSeek's meteoric rise in the past three weeks has

placed on not just overseas rivals, but also its domestic

competition.

"Qwen 2.5-Max outperforms ... almost across the board

GPT-4o, DeepSeek-V3 and Llama-3.1-405B," Alibaba's ( BABA ) cloud unit

said in an announcement posted on its official WeChat account,

referring to OpenAI and Meta's most advanced open-source AI

models.

The Jan. 10 release of DeepSeek's AI assistant, powered by

the DeepSeek-V3 model, as well as the Jan. 20 release of its R1

model, has shocked Silicon Valley and caused tech shares to

plunge, with the Chinese startup's purportedly low development

and usage costs prompting investors to question huge spending

plans by leading AI firms in the United States.

But DeepSeek's success has also led to a scramble among its

domestic competitors to upgrade their own AI models.

Two days after the release of DeepSeek-R1, TikTok owner

ByteDance released an update to its flagship AI model, which it

claimed outperformed Microsoft ( MSFT )-backed OpenAI's o1 in AIME, a

benchmark test that measures how well AI models understand and

respond to complex instructions.

This echoed DeepSeek's claim that its R1 model rivalled

OpenAI's o1 on several performance benchmarks.